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HomeMy WebLinkAboutFCS-14-042 - Development Charges Update REPORT TO:Planning and Strategic Initiatives Committee DATE OF MEETING: March 17, 2014 SUBMITTED BY: Dan Chapman, Deputy CAO 519-741-2200 x 7347 PREPARED BY: Ryan Hagey, Director of Financial Planning 519-741-2200 x 7353 WARD(S) INVOLVED: All DATE OF REPORT: March 6, 2014 REPORT NO.: FCS-14-042 SUBJECT: Development Charges Update RECOMMENDATION: That staff be directed to publish a development charge background study and hold a statutory public meeting prior to passing a bylaw to authorize the collection of development charges as required under section 12 of the Development Charges Act; And that the Council confirm its intention to complete the following capital projects which are not currently included in the 10-year capital forecast, for the purposes of including them in the development charges background study: Development Charge Master Plan Project Service Area Identified Leisure Facilities Rockway Centre Indoor Recreation Master Plan Leisure Facilities South End Indoor Turf Field Outdoor Recreation Master Plan Leisure Facilities Grand River Park Outdoor Recreation Master Plan Provision for Additional Tanker FireFire Master Plan New Fire Technology Arising from Master Plan Fire Fire Master Plan BACKGROUND: The Development Charges Act and its associated regulation allow municipalities to impose development charges to pay for growth-related capital costs that are needed to service new development. In order to do so, under the terms of the Act, municipalities must prepare a development charge background study and pass a bylaw to determine the development charges, taking the following into account: 1 - 1 A forecast of the amount, type and location of development anticipated in the city for which development charges can be imposed. The average capital service levels provided by the municipality in the 10-year period immediately preceding the preparation of the background study. A review of future capital projects, including analysis of gross expenditures, funding sources and net expenditures incurred or to be incurred by the municipality, to provide for the expected development. An examination of the long term capital and operating costs for capital infrastructure for each service to which the development charges relate. Development charge (DC) bylaws have a maximum term of five years. Kitchener’s primary DC bylaw expires on June 23, 2014. In order to update the bylaw, a background study must be published, and at least one public meeting must be held The purpose of this report is to seek formal Council authority to publish a background study and schedule a statutory public meeting. Further, direction is being sought regarding the capital program to be used in preparing the background study. The City has retained Hemson Consulting Ltd. to assist with the preparation of the DC background study and bylaw. A representative from Hemson will be in attendance for this meeting and will update the Committee on the City of Kitchener’s DC process. REPORT: Background Study and Public Meeting City staff have been gathering the necessary information to prepare a DC background study and are now at a point to seek direction from Council to publish the background study and hold a public meeting as required under section 12 of the Development Charges Act. The public meeting will be held as part of a Finance and Corporate Services Committee meeting on April 28, 2014. In addition to the statutory public meeting required by the Development Charges Act, staff have engaged a broad cross-section of industry stakeholders in February and requested their feedback in March. This feedback will be considered in preparing the background study and bylaw. A summary schedule is provided below which outlines the upcoming Committee/Council meetings where DCs are planned to be discussed and approved. The upcoming meetings will include detailed information about the proposed DC rates, growth projections, historic service levels and full listing of capital projects contemplated in developing the 2014 DC background study and bylaw. Information Date Meeting Subject Online April 28, Finance and Final DC background study and bylaw April 4, 2014 2014Corporate Servicesto Committee/ statutory public meeting May 26, Approval of DC background study and CouncilMay 23, 2014 2014bylaw Intention to Complete Projects Not Included in the 2014 Capital Budget To include an item in the DC background study, Council must express its intent to undertake the capital work. This is typically done by approving a multi-year capital budget and forecast, but due to timing or funding constraints, from time to time there may be capital projects that are not currently in the current capital budget. Council can include them in the DC background study and include them in a subsequent updates to the capital budget. Staff have identified a small 1 - 2 number of projects that are not included in the 2014 capital budget and forecast, but have been identified as part of a master plan study. The Leisure Facilities Master Plan was approved by Council on September 16, 2013 (report CSD-13-082) and included a prioritized ranking of indoor and outdoor recreation projects to be forwarded to the DC background study process. Three of the projects on the recommended list (Rockway Centre, South End Indoor Turf Field, and Grand River Park) were not included as part of the 2014 capital budget. The Fire Master Plan is currently in a development stage and has not been presented to Council, but early indications from that work suggest that two additional capital projects (Provision for Additional Tanker, and New Fire Technology Arising from Master Plan) are warranted within the next 10 years to ensure efficiency and effectiveness of the City’s Fire service. Including these projects in the background study will enable the City to incorporate them into the calculation of the development charge rate. Final authorization for the projects will occur through future budget and purchasing decisions of Council. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: Foundation: Efficient and Effective Government Goal: Financial Management Strategic Direction: Strive for competitive, rational and affordable taxation levels FINANCIAL IMPLICATIONS: There are no financial implications associated with this report. COMMUNITY ENGAGEMENT: Inform – This report has been posted publicly as part of the agenda to inform the public. As noted in this report, future reports will include additional information about development charges and will include a public engagement component where consultation will be expected. ACKNOWLEDGED BY: Dan Chapman, Deputy CAO (Finance and Corporate Services) 1 - 3